There has been some confusion about the tax filing / tax payment deadline extensions. On Friday, March 20 we got some clarity that both the filing and the payment deadlines have been extended from April 15 to July 15 giving all taxpayers and businesses additional time to file and make payments without interest or penalties. However, it has been difficult to keep up with the most up-to-date changes. Here are some IRS updates you should know.
The IRS is now instituted a policy that provides the following to all “taxpayers”. This includes individuals, trusts, estate, partnerships, associations, companies or corporations regardless of whether or how much they are affected by COVID-19. This includes a taxpayer with a Federal income tax return or a Federal income tax payment due on April 15, 2020, the due date for the filing and paying is now automatically postponed to July 15, 2020, regardless of the size of the payment owed. A Form 4686 for Form 7004 does not appear to be needed. However, no extension is provided for the payment or deposit of any other type of Federal tax, such as an estate tax or gift taxes or the filing of any Federal information return.
As a result of the policy the period from April 15, 2020 to July 15, 2020 is disregarded in the calculation of any interest, penalty, or addition to tax for failure to file the postponed income tax returns or pay the postponed income taxes. However, the interest and penalties will begin to accrue again on July 16, 2020.
If you are expecting a refund, however, the Treasury Department encourages you go ahead and file as soon as possible – the sooner you file, the sooner you will get your refund. The IRS has indicated that despite the COVID-19 outbreak, most tax refunds are still being issued within 21 days.
Resource: Tax filing deadline moved to July 15, the latest measure to battle coronavirus downturn, The Washington Post, March 20, 2020
